Gujarat High Court
Geo- Fresh Organic vs Union Of India & 3 on 6 August, 2015
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/8745/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8745 of 2015
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GEO- FRESH ORGANIC....Petitioner(s)
Versus
UNION OF INDIA & 3....Respondent(s)
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Appearance:
MR AY KOGJE, ADVOCATE for the Petitioner(s) No. 1
MR MA SAIYAD, ADVOCATE for the Respondent(s) No. 2 - 4
PRIYANK P LODHA, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 06/08/2015
ORAL ORDER
Heard learned advocate Mr. A. Y. Kogje for the petitioner and learned advocate Mr. Rudro Chatterjee for respondent Nos. 2 to 4 in respect of admission, as well as on the grant of interim relief.
2. The petitioner is engaged in export of organic agricultural products. The petitioner possesses a certificate issued by the agency namely Ecocert India Private Limited-a certification body recognised and registered with Agriculture and Processed Food Products Export Development Authority (APEDA)- respondent No.3-herein. The certificate extends to 118 organic products. It is valid from 30.03.2015 to 28.03.2016.
2.1 Respondent No.3-Agriculture and Processed Food Products Export Development Authority (APEDA) is a statutory body under the Agriculture and Processed Food Products Export Development Authority Act, 1985.
Page 1 of 12HC-NIC Page 1 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER Respondent No.2-National Accreditation Body is an authority functioning under the Ministry of Commerce, Government of India and is set up by the Steering Committee for National Programme for Organic Production to comply with the accreditation criteria of the programme.
3. The petitioner has called in question decision of respondent Nos.2 and 3 reflected in the communication dated 09.04.2015, whereby it is directed to suspend the export of all the organic products by the petitioner-M/s. Geo Fresh Organic for six months from 10.04.2015. Impugned decision is pursuant to and based on show-cause-notice dated 05.11.2014.
3.1 Impugned communication dated 09.04.2015 in its relevant part reads as under, "Please refer to the irregularity Notice received by European Commission on detection of Chlormaquat in Organic Soyabean exported by M/s Geofresh Organic to Italy followed by hearing before Chairman APEDA on 2/1/2015 regarding the procedural lapses operated during the inspection of the case.
National Accreditation Body (NAB) in its 26th meeting held on 23rd March 2015 reviewed the non compliance in the procedure of M/s. Geofresh in export of Organic Soyabean and decided the following:
Imposed pecuniary sanction of Rs.2 lakhs on M/s. Geofresh Organic.
Suspend from export of organic products for six months by M/s. Geofresh Organic w.e.f. 10th April, 2015. In this regard, necessary communication has also been sent to DGFT."Page 2 of 12
HC-NIC Page 2 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER 3.2 The show-cause-notice which preceded the said decision is reproduced below, "This is with reference to the irregularity notification received from European Commission regarding detection of Chlormequat in Organic Soyabean exported by Geofresh Organic, Gujarat to Italy in January 2013.
The investigation carried out by APEDA indicated that the traceability of the product could not be established as there were discrepancies in the shipping documents. It has also been noted that the grower group from which the exported product was purchased by Geofresh was also managed by them. Since the operations of the exporter have been found not in compliance with the requirements of NPOP, you are requested to explain within 15 days of receipt of the letter on the observations and procedural lapses mentioned in Annex 1.
Kindly note that this is the second show cause notice issued by APEDA in 2014.
This issues with the approval of Competent Authority."
3.3 The aforesaid show-cause-notice mentions certain procedural lapses as per Annex 1 attached thereto. The procedural lapses identified in the organic operation of the petitioner were mentioned thus,
(i) The analysis of the per-shipmen sample was carried out at Reliable Lab (15th December 2012) and Agri Paradigma (14th December 2012) before arrival of the product at the exporters unit from the grower group (on or after 18th December 2012 as the invoice raised on 18.12.2012). Due to this, the traceability of the exported consignment could not be established during the investigation.
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(ii) The test report of the Reliable Lab indicated two dates in different pages as 11.01.2013 (1st and 2nd page) and 15.12.2012 (3-6 pages) indicated that the document could have been manipulated. Hence, the authenticity of the document submitted to APEDA is doubtful.
4. Learned advocate for the petitioner assailed the impugned decision and submitted that the ground mentioned in the impugned decision about detection of Chlormequat in the organic product Soyabean is without any factual basis. It was submitted that the said product Soyabean was exported to Italy, where it was analyzed by the agency in its laboratory, and it was found that the same had in its quantity of Chlormequat below the limitation. Learned advocate invited attention of the Court to the certification granted by the said agency, copy of which is at page 30,and particularly page 36 mentions that Chlormequat was within the limit.
4.1 Learned advocate further submitted that the show- cause-notice mentioned on the procedural lapses is only showing discrepancy between certificate dated 11.01.2013 on one hand and the analysis report dated 15.12.2012. It was submitted that the certificate dated 11.01.2013 was a weight certificate, which referred to the weight at the time of shipment of the consignment to Italy. The analysis report dated 15.12.2012 was a report regarding sample analysis carried out in India before the consignment was shifted to Italy. The said analysis report was by one Reliable Laboratory which was also certified by respondent No.2. On the basis of the certification and Page 4 of 12 HC-NIC Page 4 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER analysis report carried out in this country at the time of sending the organic Soyabean to Italy, as well as analysis undertaken by the agency at Italy upon its reaching there, learned advocate submitted that at both the junctures, the product was found unadulterated; the same was certified to be with the meeting with the standards. Learned advocate further submitted that the show-cause-notice was issued alleging that the product Organic Soyabean confirms with the standards of quality, however the impugned decision travels beyond the show-cause-notice.
4.2 Learned advocate for respondent Nos.2 to 4submitted that the petitioner is an operator under the National Programme for Organic Production. The petitioner is supposed to comply with the standards of quality for exporting various organic products as specified by respondent No.3-APEDA. It was submitted that the case of Soyabean was not the first instance; in past also, there was an occasion to issue show- cause-notice to the petitioner concerning another product-chilly powder exported to Japan. He submitted that at that time, in the said product, a pesticide called Triazophos was detected and action was required to be taken against the petitioner.
4.3 Learned advocate relied on various contentions raised in the affidavit-in-reply filed on behalf of respondent Nos.2, 3 and 4, to submit further that in respect of export of Soyabean, the complaint was received from the European Union about detection of Chlormequat. He submitted that the agency-Ecocert Page 5 of 12 HC-NIC Page 5 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER carried out investigation and based on the findings of that agency, show-cause-notice dated 05.11.2014 came to be issued. It was further submitted that the said report was placed before the Accreditation Body and the petitioner was given an opportunity of hearing and audience on the question before passing the impugned order of suspension.
4.4 Learned advocate for the respondents further submitted that the petitioner has not complied with the standards in its export of organic products, hence the export of all the products by it is ordered to be suspended. He submitted that the element of Chlormequat was noticed to be present in the Soyabean after analysis and investigation. He submitted that continued violation by the petitioner in respect of the quality would tarnish the image of the country at International level. It was sought to be emphatically submitted that the impugned order is culmination of the past events.
4.5 It was next submitted by learned advocate for the respondents that the petitioner has a remedy of appeal as provided in paragraph 4.5.19 of the National Programme for Organic Production. According to his submission, since the appeal is provided before the Secretary (Commerce), Government of India, the petitioner may be relegated to the said remedy and this petition is not required to be entertained.
5. It is pertinent to refer that after notice was issued in this petition, the court on 02.06.2013, Page 6 of 12 HC-NIC Page 6 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER following order, "1. Learned Advocate Mr. M. A. Saiyad has tendered an affidavit on behalf of respondents No.3 and 4. The same is taken on record. Learned Advocate Mr. Rudro Chatterjee for respondents No.2, 3 and 4 requests for time.
2. Learned Advocate Mr. A. Y. Kogje for the petitioner opposes the request for adjournment. He has submitted that the respondent authorities have grievance with regard to organic soyabean exported by the petitioner to Italy. However, by way of the impugned order the concerned respondent authority has suspended the export of organic products of the petitioner for a period of six months. The said order was passed on 09.04.2015 and a period of more than one month is over by now. Therefore, the respondent authorities be directed to permit the petitioner to export the other organic products except soyabean.
3. It is open for the petitioner to make such a request before the respondent authority and the respondent authority shall consider the same, in accordance with law.
4. S.O. 10th June, 2015."
5.1 Thereafter, on 10.06.2015, this court recorded as under, "Grievance and challenge in the petition is directed against order passed by the Agriculture and Processed Food Products-respondent No.3 herein whereby it has suspended permission to export of organic products.
When the matter came up today, learned advocate Mr. Rudro Chaterji for respondent No.2- National Accreditation Body stated that a meeting of respondent No.2 is scheduled to take place on 12th June, 2015, in which, the grievance voiced in this petition by the petitioner would be looked into. Learned advocate for respondent No.2 states that the present petition will be treated as a representation by the Accreditation Body. It was Page 7 of 12 HC-NIC Page 7 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER stated that question of lifting the suspension in respect of organic products other than Soyabin would be considered in the meeting.
In that view, the matter deserves to be placed after the meeting so as to await the decision of respondent No.2.
Put up on 17th June, 2015."
5.2 On the subsequent date of hearing, learned advocate for the respondents informed that the representation of the petitioner was not accepted and the impugned order was maintained by respondent No.2.
6. Now, there is no gainsaying that the show-cause- notice dated 05.11.2014 refers about irregularity of detection of Chlormequat in organic Soyabean exported by the petitioner to Italy in January 2013. It mentions about investigation carried out by respondent No.3 authority-APEDA and calling upon the petitioner to explain about alleged non-compliance of requirements of National Programme for Organic Production (NPOP) for non-observance of quality standards in the product for the item organic chilly powder. The lapses on the basis of which non- observances of the quality standards were alleged, were as mentioned in Annex 1 reproduced above.
6.1 As is noted above, Organic Soyabean was tested for its quality and ingredients so as to meet with the required standards. At the time when it was shipped to Italy, the same was again tested by the agency at Italy. In both the tests, the product passed the test of requisite standards, in particular, quantity limitation of Chlormequat. It is not in dispute that Page 8 of 12 HC-NIC Page 8 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER the laboratory which carried out the investigation in India is recognised laboratory by respondent No.3- APEDA. The contention of learned advocate for the petitioner that the foreign buyers which actually used the product, have not raised any complaint about the quality of Soyabean, could also not be lightly brushed aside, at least at this stage of consideration of the matter.
6.2 As far as the case of the respondents that this was a second instance where the petitioner was found to be not complying with the standards in exporting organic products, it is not well-founded to draw any support therefrom. Notice was given on the first occasion on 16.06.2014 alleging that in export of red- chilly powder, element Triazophos was detected. The said notice is produced (Annexure H page 96). It could be gathered that the same was not by respondent No.3- APEDA, but was issued by the said agency-Ecocert India Private Limited. The case of the petitioner in this regard has been that it was only a sample analysis and the product was not exported at all. On the other hand, learned advocate for the respondents submitted that not only agency-Ecocert, but even APEDA had issued show-cause-notice at the relevant point of time. Be as it may.
6.3 In any view, the said instance rested there. On 28.10.2014, the order was passed reducing the period of suspension imposed at that time in respect of said organic product. The communication in that regard dated 28.10.2014 (page-100) stated as under, Page 9 of 12 HC-NIC Page 9 of 12 Created On Sat Aug 08 02:02:35 IST 2015 C/SCA/8745/2015 ORDER "Following the hearing of 30th September 2014, the Appeal Committee has accepted to withhold its final decision regarding your Appeal against the suspension of your NPOP certification of processing and trading bearing scope certificate no. ORG/SC/1006/000305 and ORG/SC/1305/000663, until submission of the initial communication (with N. Harvest Co. Ltd. in Japan) as an evidence reflecting that the consignment sent to Japan was a sample/trial order.
On 9th October, 2014 you have submitted to ECOCERT India Private Ltd. the copy of an email dated June 26th 2013 sent by N. Harvest Co. to Geo Fresh Organic. Based on the review of such email, the Appeal Committee has decided to reduce the period of suspension of your NPOP certification from 6 months to 4 months as from the receipt date of the letter notifying the suspension."
6.4 As far the contention of other side about remedy of appeal is concerned, the said contention is stated to be rejected. On bear reading of Clause 4.5.19 of NPOP pressed into service by the respondents, under the said Clause, appeal is provided to be preferred by the Accredited Certification Body only. Appeal is not made available to the exporter. Learned advocate for the respondents wholly misread the said clause to contend in vain so as to relegate the petitioner to that remedy of appeal which is not available. In any view, in the facts of the case, the petitioner made a representation and remedy is not available, as contended.
7. In view of aforesaid facts, reasons and observations from the material on record, the case is made out for admission of the petition. Therefore, RULE, returnable on 7th September, 2015.
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8. As far the question of interim relief is concerned, there are weighter reasons, in addition to what is recorded hereinabove.
9. The show-cause-notice was clear enough to be limited in respect of detection of Chlormequat in a product Organic Soyabean. The petitioner was called upon to show cause on the Organic Soyabean allegedly not meeting with the standards. Based on said show- cause-notice, the order passed is of suspending the export of entire range of different organic agricultural products exported by the petitioner under the valid certification. The certification is also not cancelled. The penal action reflected in the impugned decision definitely travels beyond the contents of and the allegations in the show-cause-notice. The order suspending export of all the organic products by the petitioner could not be justified in that view. The order passed upon a show-cause-notice, but in its import not matching with the allegations and travelling beyond the scope of show-cause-notice cannot be allowed to operate. For the above consideration, the order insofar as it imposes suspension of export of all the organic products is not based on factual foundation and in that way, it is in breach of natural justice. The order accordingly suffers from the clear legal infirmity, since it imposes a penalty over an allegation not contained in the show-cause-notice. This makes out a strong case for grant of interim relief, at least in respect of organic products other than Soyabean.
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10. By way of interim relief, it is directed that impugned communication dated 09.04.2015 shall operate in respect of Soyabean only.
11. As far as pecuniary sanction of Rs.2 lakhs imposed is concerned, learned advocate for the petitioner makes a statement that the petitioner shall deposit the amount within a period of 15 days from today.
Direct service is permitted.
(N.V.ANJARIA, J.) chandrashekhar Page 12 of 12 HC-NIC Page 12 of 12 Created On Sat Aug 08 02:02:35 IST 2015